Mutual Fund |
September 14What is a SIP? How to Invest in Mutual Funds via SIP?
SIP or Systematic Investment Plan is a method
of investing a fixed sum every month in a mutual
fund scheme. You can choose between different equity and debt funds.
SIP allows you to buy units regularly on a fixed date.
This long-term systematic investment plan can
provide higher returns and minimize risk as well. Investing in a mutual fund
SIP is a smart way to channelize your savings to create long-term wealth. You
can invest your hard-earned money in a planned and systematic manner with SIPs.
What Makes SIP the Best Way
to Invest in Mutual Funds?
Investing through a SIP comes with a number
of benefits:
· Power
of compounding: With a SIP, you invest a small amount
regularly for a long-term, starting at an early age. This gives you the benefit
of compounding and creates wealth.
· Rupee
cost averaging: By investing a fixed amount of money
consistently for a long time, you get a lower average cost.
· Easy
to invest: Investment in a SIP can be done easily
over a few mouse clicks. It doesn’t have a complicated process.
· Small
capital: You don’t need big money to invest in a SIP.
It can start with as low as INR 500 per month.
How to Invest in Mutual
Funds via SIP?
Before starting any investment, you should
consider listing down your dreams. Then set realistic financial goals and work
out a plan to achieve them.
Once you’ve figured out your SIP goals, it
becomes easier for you to choose the right funds.
However, investing in a SIP requires you to
complete your KYC (Know Your Customer). For this, you need to submit
your identity proof and address proof and get your IPV (In-Person
Verification) done.
Identify the schemes in which you would like
to invest. These might include equity funds, debt funds, and tax-saving funds.
You should diversify your investments through multiple SIPs in different
schemes to optimize returns and minimize risks.
Experts recommend you to invest for a
long-term to enjoy the twin benefits of the power of compounding and rupee-cost
averaging by working through different market cycles.
Complete the formalities for SIP investment
including forms and cheques. And start investing in the mutual fund SIP of your
choice.
Final Thoughts
Enjoy the benefits of investing in a SIP to
grow your funds. Have you ever invested in mutual fund SIPs? Please share your
experience with us in the comments below.
